Sea Freight Forwarding

A Magellan solution for all your business needs

Sea Freight Forwarding

Whatever you need to ship, we can deliver it anywhere – safely and on time.

Benefit from our global partner network and container consolidation services that provide the highest level of flexibility and transit-time reliability.

  • FCL: Seamlessly and cost-effectively land your regular or bulky shipments utilising our network of tier one carriers
  • LCL: When you just don’t have enough cargo to fill a container, whichever way you cut it; but what you have can’t wait. LCL shipping and buyer’s consolidations are an essential part of a flexible logistics mix, helping you to save money, manage your inventory and your cash flow
  • Flexible un-pack and delivery solutions
  • RORO, dry bulk shipping, over-sized and out of gauge cargo, and reefer also available
  • Full end-to-end supply chain management
  • Automated reporting and real-time data integration between your system and ours allows full visibility and control of all shipping activity
  • Our Australian Trusted Trader accreditation recognises our secure supply chain and compliant trade practices and provides a range of trade facilitation benefits

What goes into a sea freight cost?

Sea freight rates

Sea freight is the most common mode used by importers and exporters. In fact, around 90% of all cargo is shipped by sea.

Why Sea Freight?

Sea freight is can handle high volumes and is the most economical. One container can hold 60 fridges or 400 flat-screen TVs or 4000 shoeboxes or 200 mattresses.

There are few restrictions on cargo types compared with airfreight. Goods restricted from air freight such as gases, flammable, toxic or corrosive goods, magnets and some types of chemicals can be all sent by sea.

CO2 freight emissions from sea freight are a fraction of that of air freight. For example, according to DEFRA, 2 tonnes shipped for 5,000 kilometres by sea freight will lead to 150kg of CO2 emissions, compared to 6,605 kg of CO2 emissions for air freight.

How is seafreight charged?

FCL (Full Container Load) sea freight is charged by the container size, generally a 40’ will be 2 x the cost of a 20’. Rates are market driven and are generally only valid for a month.

LCL (Less than Container Load) is charged by the cubic metre and forwarders will consolidate freight from various shippers into an FCL and ship to the destination, port charges are very high for LCL and therefore the break-even point for LCL to FCL is generally around 12-13 CBM. That is, if you have over 13 CBM it is cheaper to ship as FCL than LCL – yet 25-30 CBM fit into a 20’ FCL.

A typical FOB freight quote includes:

Freight charges – the actual shipping component

Details on a typical quote include origin, destination, service, transit time, currency, freight rate and low sulphur, and hazardous materials surcharges.

Arrival charges – getting the cargo from the destination port to you

Customs and quarantine clearance, container freight station (these are the consolidation charges, and apply for LCL (less than container load cargo only), security fees, terminal handling fees (charged by the airport or port authority), pickup, delivery, empty slot and infrastructure fees (cartage)

The following list is some of the factors that contribute to freight pricing. We think we will be a few in here you might not have been aware of:

    • Bunker Prices (or BAF) the floating part of sea freight charges which represents oil prices.
    • Currency adjustment factor (CAF) is a fee placed on top of freighting charges to offset any losses from fluctuating exchange rates.
    • Service Changes: Whenever there are significant changes in services, capacities, alliances etc., this affects rates and opens an opportunity to renegotiate.
    • Space: The bigger the imbalance between supply and demand for space, the bigger the discount or premium.
    • Weight: Some trades can be weight restricted before being space restricted.
    • Equipment: On each trade lane carriers know whether they have a deficit or surplus of each container type.
    • Cross Subsidies: Both customers and carriers can use cross-subsidy tactics between trade lanes or container types to their advantage.
    • Risk: Your volatility of a trade lane will determine whether you pay a premium for a longer validity or get a discount for the promise of long-term support.
    • Extension to detention free time can increase rates as the lines prefer their empties returned quickly.
    • Intended destination: In simple terms, the longer the journey, the higher the shipping rates.
    • Season: Seasonal cargo (e.g., fruit and vegetables) will have higher cargo rates during their seasons.
    • Fines and Fees: If there is any delay in reaching port due to over-crowding, there might be a fine imposed.
    • Terminal Fees: Fees at origin and destination known as terminal fees also affect freight rates.

Smart supply chain professionals understand that genuine savings are in the innovative and creative ways they can successfully measure and improve their supply chain and not just in freight rates.

Questions to ask.

  1. Does your partner give you a deal which delivers on value as well as price?
  2. Is your partner transparent and are you informed of key relevant market intelligence?
  3. Does the rate reflect your supply chain goals or is there pressure on your operation because of a tight agreement?
  4. In times of need, are you offered solutions?
  5. Have you been able to rely on your partner through the high season as well as the low season?

 

What is happening with international freight rates now?

Space constraints are a major issue across all Asia / Australia trade lanes, especially China where equipment shortages have also become a major challenge. Some shipping lines have started implementing surcharges on some equipment types.

As consequence freight rates have grown rapidly since August 2020, accelerating ahead of the China National Holiday and reached record levels by the end of 2020. Rates have so far remained high into 2021 with many predicting this as a new normal for a while to come.

Measures shipping lines have taken to manage the space constraints include.

    • More frequent rate changes: daily/weekly instead of monthly rate offering, rates keep rising!
    • The strict control of space allocations by evaluating the earlier support by individual clients during the low season.
    • Earlier bookings (14 – 21 days booking in advance)
    • More new charges imposed eg, cancellation fees.
    • Rationalisation of named account space allocation for earlier contracts
    • Named account rate negotiations on hold.

WHERE WE EXCEL

Catering to your high fashion needs

A solution that provides the utmost attention to detail – perfect for clients who seek to import high fashion goods that require that little bit of extra care.

Avoid unnecessary obstacles

No one likes surprises, especially when they turn into obstacles. We’re always one step ahead of the competition, providing you with the advice and guidance to help you avoid any unnecessary issues.

Proprietary communications system

We have spent 10 years designing and perfecting a communication system that ensures you can relax – safe in the knowledge that each step has been managed carefully and professionally. Our up-to-date reports let you know all the important details so we can spend less time fixing problems and enjoy more time building relationships.

Who said logistics was boring?

Whether you’ve been in the industry for 20 years or three months, knowledge of crucial & cost-saving information is essential to effectively running your operations. Do you know the duty on footwear produced in developing countries?, or that you can actually increase your speed to market by trucking cargo to a different port of origin? We live and breathe logistics – tap into our knowledge to make your freight forwarding run smoothly.